See You in 6 Months. And Your Insurer Is O.K. With the Bill.

Sunday

Jun 27, 2010 at 12:01 AMJun 28, 2010 at 5:14 AM

Instant electronic processing of medical insurance claims has long been discussed, but its adoption has been slow.

RANDALL STROSS

WHILE you’re putting your clothes back on in the doctor’s exam room, a new conversation could begin. Not between you and the doctor, but between your doctor’s software system and your insurer’s system.

Here’s how it could work: A claim is generated and submitted electronically before you finish tying your shoes. By the time you reach the checkout desk, your doctor has received a payment commitment from your insurance company, just as Visa and MasterCard provide to a merchant after a customer swipes a card.

It’s not fantasy. Instant processing has been discussed in the health care industry long enough that it has acquired a formal term: “real-time claims adjudication.” But progress toward universal adoption has been slow.

The American Medical Association has released its “2010 National Health Insurer Report Card,” which has a section on the timeliness of insurers’ response to claims submitted electronically by doctors. For the seven major insurers it studied, the median number of days for responses ranged from 5 to 13.

When asked what accounts for the passage of so much time, Mark Reiger, chief executive of NHXS, a software provider specializing in services to physicians, and a contributor to the study, said, “I wish I had a good answer.”

It doesn’t take long for insurers to internally process most claims — at the big insurers, which handle more than a million claims a day, all must be processed the same day they come in, or the company’s “in box” would be overwhelmed the next day, Mr. Reiger said.

But once claims are “priced” — that is, the amount to be paid is determined — they are turned over to the department that handles the insurer’s payments. That department is not slowed for any technical reason but may have myriad business reasons to delay payment. According to Mr. Reiger, the best evidence of this is the actions of contractors who administer Medicare claims. They are required to make payment by the 15th day, and data gathered from NHXS’s physician clients show that the insurers almost always pay on the 14th day, not sooner or later.

Nonetheless, some large insurers, led by Humana, have been pushing the rest of the industry to adopt real-time claims adjudication. Humana’s initiative began in 2003, but the very idea that a claim could be adjudicated instantly remains so novel to many doctors that Humana’s Web site must explain that “once the claim has been submitted in ‘real time’ and an accepted claim response from Humana has been received, your transaction is complete.”

“There is no need to submit the claim again,” the site adds.

It is doctors who seem to be the primary obstacle. Doctors are paid for seeing patients, not for sorting through more than 14,000 diagnostic codes and 4,500 procedure codes while a patient sits on the exam table.

Larger practices have a staff member whose full-time responsibility is assigning codes for claims and making sure that no service rendered goes unmentioned. This is called “charge capture” in the business, and there’s nothing like it in the retail environment. In stores, bar codes and scanners take care of “charge capture,” without a human needing to look up codes one by one.

In medicine, if the provider works in a narrow specialty — say, a mammography clinic — the range of codes is small and can be handled in real time. But a generalist like an internist, who deals with a high volume of patients with varying ailments and insurance plans, would be hard pressed to have a claim prepared while the patient was still in the examination room.

Marylou Bailey, a health industry expert at Accenture, the management consulting company, says the principal precondition for adoption of real-time claims adjudication is to have doctors use electronic medical records — and to enter the data as they see patients.

Ms. Bailey says she recently saw a specialist for a medical condition, and the doctor had an assistant whose sole responsibility was to sit at the doctor’s side, entering data into the electronic record and checking medical reference Web sites as the doctor-patient conversation proceeded. As a specialist, her doctor could afford to have a full-time shadow to handle real-time record-keeping; the arrangement would be unaffordable, she says, for a primary care doctor who receives much lower fees.

A CRUCIAL step is to get electronic medical records into all doctor’s offices. Most physicians still don’t use such records, and among those who do, information is often not entered in real time but in a batch at the end of the day by an assistant, Ms. Bailey says.

She praised the Obama administration’s stimulus program for providing money to adopt electronic records and for requiring participating physicians to demonstrate that the equipment they buy is actually being used.

“We already have data standards and utilities for connecting different systems” in the health care industry, she says. “But without the underlying clinical data captured at the point of care, you don’t have anything meaningful to exchange.”

David Cutler, a Harvard economics professor, says he believes “we can halve within five years” the $250 billion to $300 billion that he estimates is spent annually on administrative costs of health care. Real-time claims adjudication is a big component of his proposals. If records are online, insurers can see test results and previous treatments — everything needed to judge a claim right away and not have to come back later and demand more data.

“Imagine,” he says, “if Visa came back two weeks later, requiring more documentation.”

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